Little attention has focused on barriers to coverage among the privately insured children, although, a large portion of the American children are covered under private insurance. Especially in an era of deteriorating private coverage, it has become very important to investigate whether privately insured chronically ill children are at risk for treatment. Our study aims to fill this gap using a unique longitudinal dataset that contains information on a large group of privately insured children and their families. In this project, we will take a first step in investigating how parents respond to private insurance cost sharing regarding health services use of their children by studying the impact of prescription drug coverage on outcomes by the chronically ill children. The primary specific aim of the proposed research is to determine how changes in prescription drug cost sharing affect adherence to prescription drug therapy for various chronic conditions among the privately insured chronically ill children. As a secondary aim, we propose to identify the effect of prescription drug cost sharing on inpatient and outpatient spending among the chronically ill children. In both aims, we will control for other health plan characteristics, child's own characteristics, co-morbid conditions, general family characteristics, and the out-of-pocket burden of other family members.